Economic Slowdown Takes Toll On Property Sales

The economic
slowdown and scarcity of foreign exchange currently plaguing the country, is taking its toll on the real estate sector of the Nigeria economy.
The Project Manager, Rainbow Town Limited, Mr Ebi Bozimo, made this assertion in an interview with The Tide, in Port Harcourt last week.
Bozimo explained that each time there was a drop in the currency of any nation the real estate sector was usually the first hit.
According to him, “anytime there is a drop in the country’s currency, first sector to be affected is the real estate sector, reason being that, investing in property is highly capital intensive, most people would want to meet basic needs of their families, which are of lesser costs before even thinking of buying property”
He expressed regrets that due to the economic downturn and lack of foreign exchange, prices of raw materials and finished goods have skyrocketed, stressing that this is due to the over-dependence on imported goods”.
Bozimo also explained that, prices of property do not increase commensurably with increase in prices of building materials and services; this, he said portends low profit margins for property developers.
He lamented that presently, most transactions are done at lower prices, and developers are forced to sell at lower rates, because if you don’t sell, your property would remain unoccupied and soon weathering would take its toll. People find it difficult to pay rents how much more buy property, so we have to sell even at low profit margin”
He expressed optimism that the real estate sector which grew by 8.7per cent to become the sixth largest sector in the economy in terms of its contributions to the Gross Domestic Product (GDP) would again find its feet as soon as the economy improves.

Tonye Nria-Dappa